Hush Money

19 Pages Posted: 22 Oct 1999

See all articles by Andrew F. Daughety

Andrew F. Daughety

Department of Economics, Vanderbilt University

Jennifer F. Reinganum

Vanderbilt University - College of Arts and Science - Department of Economics

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Date Written: 1999

Abstract

We provide a simple incomplete-information model wherein an initially uninformed plaintiff makes a menu of settlement demands (one of which involves confidentiality) of the informed defendant. The defendant is informed about both his culpability in the harm suffered by the current plaintiff and the existence of other plaintiffs. The possibility that there are other plaintiffs the defendant might face improves the current plaintiff's bargaining position, as the likelihood of follow-on suits depends upon the visibility of the outcome of the case. For this reason, the defendant may be willing to be "hush money."

Suggested Citation

Daughety, Andrew F. and Reinganum, Jennifer F., Hush Money (1999). Available at SSRN: https://ssrn.com/abstract=182375 or http://dx.doi.org/10.2139/ssrn.182375

Andrew F. Daughety

Department of Economics, Vanderbilt University ( email )

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Jennifer F. Reinganum (Contact Author)

Vanderbilt University - College of Arts and Science - Department of Economics ( email )

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United States
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